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How NFTs and the Crypto World are Affecting Creatives

Written by: Gaia Zol, Italy

When Bitcoin launched in 2013, no one could have predicted its impact on the world. Skeptics thought that cryptocurrencies and blockchain technology were a passing and volatile trend. Almost ten years later, it’s clear the crypto universe is here to stay. During its life, it has expanded beyond the financial and trading world. Now, artists use cryptocurrency and blockchain to promote their work and sell their digital art.

It’s the “creator economy” made for artists who live thanks to online content. Forget about painting halls in the Louvre or marble sculptures in the Uffizi. The expansion of digital art involves vloggers, writers, photographers, and painters. They use the Internet to their advantage, producing unique and digital content. The pandemic simply pushed this trend, with creators who were forced to stay at home. But this is not a Covid-19 effect. The creator economy is here to stay -and so are NFTs.

Tinkerbell, NFTs, and memes

To trade art in the crypto world, people need NFTs, non-fungible tokens. These are digital certificates of ownership acquired through cryptocurrencies. These certificates can be attached to different files, including videos, images, and songs. Anyone who owns an NFT can trade it on the blockchain.

The company Injective Protocol bought a physical piece of art titled “Morons” by the famous Bansky. The crypto firm paid $95,000 for it. Then, they burnt the physical art and turned it into an NFT worth $380,000. Even Paris Hilton jumped on this wagon, and she collaborated with artist Blake Kathryn. The two created a video of Tinkerbell, Hilton’s chihuahua and the piece “Crypto Queen,” portraying Paris herself -and later sold at $1 million.

In March 2021, Christie’s sold digital art by Beeple for $69 million. The artist’s real name is Mike Winkelmann and, in a few months, he became “among the top three most valuable living artists.” Before the online auction, Beeple’s top valued piece sold at $100. The buyers of these NFTs have limited displaying rights and they might be able to resell the art at a later time.

“I do view this as the next chapter of art history,” Winkelmann said to The Verge, “now there is a way to collect digital art.”

The crypto opportunity

To make this chapter happen, artists need to use blockchain technology and cryptocurrency. The former is a safe way to make online transactions through a series of blocks recorded on a publicly visible ledger. The blocks are linked together in a chain of confirmed transactions. Cryptocurrencies use the blockchain for their transactions in a system difficult to hack.

NFTs use blockchain to represent intellectual property ownership. They are true digital collectibles. Creators can even issue their personalized tokens. But this opportunity isn’t just for creators. For example, the Colombian rum company Dictador partnered with NFT platform BlockBar to release 25 bottles of rare vintage rum to purchase with cryptocurrency.

Art, rum, and even memes. The NFT of the meme of the Disaster Girl sold for $500,000 while the Shiba Inu Doge sold at $4 million in Ethereum. Remember Success Kid? A blonde toddler, fist closed, and a white and green shirt? It sold for $32,355.75. Without a doubt, there is an opportunity for creators in the crypto universe. So much so that creator-friendly platform Patreon is considering the introduction of creator coins, aka tokens.

“What I will say about crypto and NFTs is, I really love the idea of creators owning their media and owning their content,” said Patreon CEO and co-founder Jack Conte, “I love the idea of creators having leverage and control. I love the idea of shifting power away from institutions and toward individual creative people.”

Yay or nay?

Blockchain and NFTs benefit creators, who can connect with fans and build a community. There is no need for intermediaries and artists can have unprecedented access. All they need is a digital platform to publish their work. Plus, new trends are rising, like generative art or art on-demand. With this form of art, the creator input criteria to computer softwares. The computer produces the final piece of art, following the instructions.

But crypto has its drawbacks. The market of digital money is volatile, with values fluctuating like a rollercoaster. While the prices of cryptocurrencies rise and fall, the market of digital art inflates. The Guardian reports that in May 2021, daily sales of NFTs had dropped by 60 percent. But, in July, the NFT sales rose by $2 billion. Volatile, indeed.

A final concern is the environmental impact of crypto. Blockchain technology and mining of cryptocurrency require lots of energy and the carbon offset is negative. So, is this a passing trend?

What to expect

The latest ArtTactic report showed that this is a male-dominated reality. Only 16 percent of artists are female and, between 2008 and June 2019, only 2 percent of art sold at digital auctions came from women. The disparity isn’t over. Half of the global NFT sales come from US artists and only 1.2 percent of creators come from Africa.

While cryptocurrency can lead to financial equality, NFTs and digital art have a long way to go. Still, in the first nine months of 2021, the market generated $3.5 billion. It’s a successful trend that needs to assess itself, since the opportunity for independent creators is crystal clear. The proof is the first NFT exhibition launched by the partnership between Art Basel in Miami Beach and blockchain Tezos.

The exhibition aims to "raise awareness of the new dynamic that both NFTs and the ever-evolving world of generative art bring to the art world." Whether this dynamic is a positive one, only time will tell.

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